"The central bank has already downgraded its projections for inflation which made it essential that he comfort markets by saying the ECB stands ready to do more if necessary," said Aberdeen Asset Management Investment Manager James Athey in a note.
"He didn't say it outright but there was more than a whiff of 'whatever it takes' from the press conference," Athey added.
Draghi said the quantitative easing program, that sees the bank buy 60 billion euros ($66.7 billion) worth of bonds a month could run "beyond" its original deadline of September 2016.
"The Governing Council will closely monitor all relevant incoming information. It emphasized its willingness and ability to act if warranted by using all the instruments available within its mandate and in particular recalls that the asset purchase program provides sufficient flexibility in terms of adjusting the size, composition and duration of the program," Draghi told a news conference.
The central bank lowered its forecasts for inflation and economic growth, citing a slowdown in emerging markets and weaker oil prices.
The ECB sees inflation at 1.1 percent next year, below its June forecast of 1.5 percent, and expects GDP growth in 2016 of 1.7 percent versus its June forecast of 1.9 percent.
"I am very glad he hinted at further action, but frankly I was disappointed to hear that further expansion of the balance sheet was not already considered. Given the very sizable downward revision in the inflation forecast for next year, I would have expected that further action would already be considered today," former ECB Governing Council member and former Cyprus central bank governor, Athanasios Orphanides told CNBC.
"I am not extremely concerned about the market turmoil in China, I think we need to see through that. But I am concerned by the fact that the inflation numbers and projection have not risen as much as the governing council had hoped, so looking beyond China I think an adjustment of policy would be warranted," he added.
Markets cheered Draghi's dovish comments, with the pan-European STOXX 600 surging 2 percent, extending gains after Draghi's initial comments. The euro, which strengthened against the dollar in August amid fears that China's economy was slowing, dropped around 0.8 percent against the greenback to $1.112.
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Since the central bank's last gathering in July, financial conditions have tightened, meaning liquidity in financial markets has dried up while renewed strength in the euro and the continued weakness seen in oil prices has dampened the outlook for inflation.
Inflation in the 19-country euro zone is currently at 0.2 percent year-on-year and concerns about deflation prompted the ECB to start buying 60 billion euros worth of assets a month earlier this year. A key measure of the market's longer-term inflation expectations, the five-year euro zone breakeven forward has also fallen below 1.7 percent.
"We may see negative numbers of inflation in the coming months. Is that deflation? The Governing Council tends to think that these are transitory effects mostly due to oil price effects. However, as I said before we will closely monitor all incoming information. And the Governing Council wanted to emphasize in the discussion we had today it's willingness to act, its readiness to act and its capacity to act, its ability to act," Draghi said at the press conference.